Under a contract between businesses governed by the Commercial Code, the amount payable is not necessarily a proportionate share of the contract price. If you own the unfinished building and the contract ended for a reason for which you are not responsible, such as the contractor’s delay, the law requires you to pay the amount by which you have been enriched through its construction. Advance payments you have already made are deducted from that amount. However, in another dispute, the Supreme Court of the Slovak Republic endorsed valuing the work performed in accordance with the contract. The outcome is therefore not certain in advance. If the contract provides for a different method of settlement following withdrawal, that arrangement takes precedence.
A company commissioned an industrial or office building, the contractor fell behind schedule, and the company withdrew from the contract after an additional deadline for performance passed without the contractor performing. The contractor completed only the structural shell and issued an invoice for the work performed based on the cost schedule. The amount the contractor is entitled to depends on who owns the unfinished building and why the contract ended. Where construction is on your land and you withdraw because of the contractor’s breach, a special rule under the Commercial Code (Act No. 513/1991 Zb.) applies, which does not use the contract price as its basis. However, the courts do not apply it consistently.
A building constructed on your land belongs to you
If the contractor constructs something on the customer’s land, the customer owns it while it is under construction unless the contract provides otherwise (Section 542(1)). The work performed therefore cannot be returned. For this situation, the law provides:
The following quotation is reproduced in its original language:
Ak má k zhotovovanej veci vlastnícke právo objednávateľ a vec nemožno vzhľadom na jej povahu vrátiť alebo odovzdať zhotoviteľovi, je objednávateľ povinný uhradiť zhotoviteľovi to, o čo sa objednávateľ zhotovovaním veci obohatil, ak záväzok zanikol z dôvodu, za ktorý objednávateľ nezodpovedá.
Withdrawal because of the contractor’s delay is a typical reason for which the customer is not responsible, provided the customer did not cause the delay, for example by failing to cooperate. The Supreme Court of the Slovak Republic described Section 544 as a special provision governing settlement following the termination of a works contract and stated that the contractor’s claim under that provision differs from a claim for payment of the contract price (4Obdo/40/2018, paragraphs 28 and 29).
However, the Supreme Court of the Slovak Republic has not followed this approach in every dispute. In a case involving the renovation of the customer’s building, where the customer withdrew after the contractor announced that it would not continue the work, the Court endorsed valuing work performed before withdrawal under Section 351 using the method agreed in the contract (1Obdo/5/2012). Later, in a case involving an advertising contract, it described the discussion of Section 544 in decision 4Obdo/40/2018 as obiter dictum and treated the agreed price as decisive for settlement under Section 351(2) (3Obdo/80/2019, paragraphs 24 and 31).
How enrichment is quantified
The law does not prescribe a formula. In decision 4Obdo/40/2018, the Supreme Court of the Slovak Republic distinguished invoiced amounts reflecting contract prices from a monetary assessment of the costs the customer would have had to incur to obtain the same performance, taking defects into account. In a dispute concerning an unfinished structural shell, where the customer withdrew from the contract because of the contractor’s delay, the courts used the building’s market value on the date of withdrawal and deducted the amounts the customer had already paid. The Supreme Court of the Slovak Republic dismissed the customer’s appeal on points of law and added that the valuation must also take account of the building’s technical condition, including defects (5Cdo/23/2024, paragraph 13).
The resulting amount may therefore be higher or lower than the contractor’s invoice. The condition of the building on the date of withdrawal, recorded before another company starts work on it, is often crucial evidence. The article when another contractor completes the building (forthcoming) discusses what to document. Withdrawal does not affect a claim for damages (Section 351(1)), for example for the higher cost of completion by another company, or a contractual penalty for delay, as explained in the question contractual penalties after withdrawal from a contract.
When a different approach applies
- The contract provides for settlement. The agreed procedure, such as valuing the work performed using an itemised cost schedule, takes precedence. Section 544 is not among the provisions from which the parties may not derogate (Section 263(1)).
- The contractor withdrew because of your delay. Unless your delay was caused by circumstances excluding liability, the contractor is entitled to the contract price less the amount saved by not completing the work in full (Section 548(2)).
- The contract ended for a reason attributable to you. The contractor may claim the price of items reasonably procured that became part of the building, provided they are not included in the claim under Section 548(2) (Section 544(2)).
- You are commissioning construction as a private individual. In that case, the Civil Code takes precedence in governing the contract even if it refers to the Commercial Code, as explained in the question a house construction contract under the Commercial Code.
Contracts governed by Czech law
The Czech Civil Code (Act No. 89/2012 Sb.) takes a different approach. If the contractor has performed in part, you may withdraw only in respect of the remaining unperformed part, unless the partial performance is of no value to you (Section 2004(2) of Act No. 89/2012 Sb.). The contractual obligation remains in place for the part performed and continues to provide the basis for settlement. Withdrawal from the entire contract extinguishes the obligation with effect from the outset (Section 2004(1) of Act No. 89/2012 Sb.), and performance received must be returned under the rules on unjust enrichment (Section 2993). The parties may agree on settlement in advance, as discussed in the article how to agree on settlement following withdrawal under Czech law (forthcoming).
How we can help
We will assess whether the withdrawal was valid, which settlement rules apply and how to value the completed part of the building. We will prepare a response to the contractor’s invoice. If the dispute cannot be resolved by agreement, we will represent you through our disputes concerning defects in works service. It is advisable to agree on the withdrawal procedure and settlement for unfinished construction when drafting the works contract.
This answer provides general information on the law as at 3 October 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
